Navigating National Insurance (NI) categories is crucial for employers to ensure accurate payroll processing. Changes were made to NI thresholds, affecting both employees and business owners/managers on 6 July 2022. In light of the Autumn Statement (22 November 2023) NI thresholds have remained the same, however NI contributions for employees have changed in a decrease from 12% to 10%.

Autumn Statement 2023*

From 6 April 2023 to 5 March 2024 the amount you can earn before you started paying NI remains as:

  • £242 per week
  • £1,048 per month
  • £12,570 per year

Announcements in the Autumn Statement by the Chancellor have resulted in another mid-tax year change to National Insurance contributions. Whilst the NIC thresholds appear to remain unchanged, there will be a cut in employee NIC, from 12% to 10%, from 6 January 2024.

What does this mean for employees?

Here's an example:

An employee with an NIC category of A who has NICable earnings of £2,500 per month can expect to see a reduction in the amount of NIC that they pay by almost £30 per month from 6 January.

Directors NIC

We await further guidance and will update accordingly as to the calculation of directors NIC for the 2023/24 tax year. A hybrid percentage is expected.

If an annual payroll has already been processed for 2023/24 then it's highly likely that it'll need to be amended and reprocessed due to the Chancellors announcement.

*Updated November 22 2023 in response to the Autumn Statement

It's vital to keep up with these updates to avoid penalties and errors. NI categories encompass various classifications based on factors such as age or coming to work in the UK from another country, and selecting the right one is crucial.

Regular payroll reviews are necessary to identify any changes that require an adjustment to the NI category. Employers should also be aware of special considerations for employees from EU countries and other nations with social security agreements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.